Art Insurance
Art needs to insured separately from ordinary contents. Only those things that can
be replaced with reasonable ease can be insured with ordinary replacement value insurance. Art is not replaceable with reasonable
ease. Art is unique and original.
Ordinary home insurance or commercial building insurance is not designed to cover
art and special items. Art, jewelry, antiques and other valuable and unique items need to be insured with fine art insurance.
Fine art insurance is known professionally as Inland Marine insurance. This is a very old term. Inland Marine insurance
has developed over centuries with its own rules and limits. It has become the standard insurance for art, antiques, jewelry,
antiquities and rare items that are not replaceable.
Art is normally insured based on a recent appraisal. The appraisal
must be done by a qualified person. The owner can insure the item at the appraised value or a lower value… but not
a higher value.
The insurance company and the owner “agree” on a value. Agreed value is a legal and binding
term. The insurer will pay up to the agreed value if the item is lost or damaged. The insurer will not pay more than the agreed
value even if the market value has increased.
The agreed value of the art or antique item is the basis of the insurance
premium charge. The basic rule of thumb is $1.00 charge per $100 of value. The actual rates can vary based on circumstances
such as security and location.
Some items that are extremely valuable but not protected could be uninsurable. A gold
chalice left out on an alter in a church that is not locked would be an example of an item that is uninsurable. The gold chalice
should be kept in a locked compartment or safe when not in use to be insurable.
Each art or antique item needs to be
listed carefully on the policy. Updated appraisals will be needed periodically. The owner is responsible for the appraisal.
The insurer can “repair” or “replace” when damage or loss occurs. Replace means to give the
owner the money amount agreed upon in the insurance contract. Repair means the insurer will provide enough money to repair
the item up to the agreed limit of the policy
The TOP 10 artists
Every year Artprice.com compiles a ranking of artists
based on the total revenue generated by public sales of each artist's work, with Pablo Picasso invariably taking the number
one position on the market podium. Not so in 2007: after nearly 10 years, the champion of modern art has been dethroned by
the guru of Pop art, Andy Warhol. Second in 2006, Warhol became the global market leader in 2007.
More than just one
name replacing another, this 'event' reflects a veritable sea-change in the auction world. While in the 1990s the
very pinnacle of the art market belonged to the impressionists, particularly Auguste Renoir and Claude Monet, and then, after
2000, to the moderns with Pablo Picasso and Gustave Klimt, today, and possibly for some time to come, the market has hoisted
contemporary art to the summit of the pyramid.
In 2006, the only members of
the contemporary segment among the top 10 artists were Warhol, Lichtenstein and Willem de Kooning, representing Pop art and
American abstract expressionism. In 2007, the contemporary presence considerably broadened with the arrival of Francis Bacon,
Mark Rothko and Jean-Michel Basquiat. With no major masterpieces coming to auction during the year, both Gustave Klimt and
Egon Schiele have slipped out of the top 10.
In 2007, total revenue generated by the top 10 artists amounted to more
than USD 1.8 billion, a figure representing an increase of over 50% compared with the previous year! This spectacular rise
was driven essentially by Andy Warhol and Francis Bacon, whose works - alone - fetched USD 400 million more than in 2006!
Prices have rocketed and the entry ticket to the Top 10 has shot up by 44.8% versus 2006: in concrete terms, this means that
in 2007, each artist had to generate at least USD 86 million to get into the Top 10 compared with only USD 59 million the
previous year.
1 – Andy WARHOL : 420 M $
In 2007,
Andy Warhol confirmed his art market star status by moving from third to first place in the ranking with a total sales revenue
up USD 220 millions on the previous year and an underlying price index progression of +450% over 10 years. Already in 2006,
Warhol's works generated 43 sales above the million-dollar line, i.e. 8 more than the market su premo Pablo Picasso…
However, that was pale by comparison with 2007 when there were no less than 74 multi-million dollar sales of Warhol's
works dating from the 60s to the 80s. For 8 years, his price record has been USD 15.75 million for Orange Marylin.
But in May 2007, his Green Car Crash (Green Burning Car I) went under the hammer at Christie’s New York for
USD 64 million after being estimated at between 25 and 32 million! This kind of inflation tends to accelerate market turnover
and some lucky owners have generated handsome gains over very short periods. For example in November 2007, the actor Hugh
Grant sold a Warhol Liz (portrait of Elizabeth Taylor created in 1963) for USD 21 million at Christie's after
having paid only USD 3.25 million just 6 years earlier, and after a Liz from the same series fetched only USD 11.25
million at Sotheby’s in 2005.
2
– Pablo PICASSO : 319 M$
In 2007, the biggest number generated
by a Picasso work was USD 27.5 million for Femme accroupie au costume turc (Jacqueline). Large though this sum was,
it was a far cry from the USD 93 million generated in 2004 by his Le Garçon à la Pipe, a rare masterpiece
from his pink period (1905). However, the most impressive Picasso sale in 2007 was not a painting, but a bronze statue entitled
Tête de Femme, Dora Maar. Going under the hammer for USD 26 million at Sotheby’s November sales in New
York, it thereby acquired the status of the most expensive sculpture on the global art market. Tête de Femme
is the first Picasso sculpture to exceed the USD 10 million mark and it took the total number of eight-figure sales
of sculptures in 2007 to 9 (compared with 6 in 2006) reflecting the tremendous momentum of modern sculpture - currently showing
stronger price growth than paintings from the same period - with a price index up more than 100% over 10 years. Despite generating
45 sales above the million-dollar mark, i.e. 10 more than in 2006, Picasso's annual sales revenue was down by 20 million
dollars in 2007 However, this does not mean that he has gone out of fashion: remember that in 2006 his annual sales revenue
shot up 116%, driven notably by the spectacular sale of Dora Maar au chat for USD 85 million. Hence, this second
position in the Top 10 does not reflect any contraction of his market value. Multi-million dollar sales of Picasso's works
are more common than ever, but his annual revenue is simply being limited by the increasing rarity of his major works on the
market.
3 – Francis BACON : 245 M $
Bacon's tormented bodies are not scaring
buyers away! Quite the reverse; collectors adore the intensity of his works, so much so that his index has more than tripled
over 10 years! From 19th position in 2006, Bacon was projected into third place in our Top 10 ranking in 2007 with annual
sales revenue up USD 200 million! This spectacular progression was punctuated by seven exceptional sales: seven paintings
sold for over USD 10 million each, all between February and December 2007. The series included a new price record for a work
by Francis Bacon: Study from Innocent X fetched USD 47 million on 15 May 2007 at Sotheby’s NY. Six months after
that sale, his Second version of study for bullfight N°1 (1969) confirmed the rapid acceleration of his prices
when the hammer fell at USD 41 million, again at Sotheby's NY. The enthusiasm for Bacon's work has prompted a number
of collectors to sell their works by the artist. This has produced a rich supply for the market with thirteen canvases coming
up for auction in 2007 compared with an annual average of between 2 and 7 over the 1997-2006 period.
4 – Mark ROTHKO : 207 M $
The arrival of Mark Rothko in the Top 10 has
further contributed to the emerging American dominance of the ranking and it illustrates the dynamism of post-war art prices.
In fact, his White Center, created in 1950, became - in one strike of the hammer - the most expensive post-war artwork
on the auction market and, simultaneously, the highest sale of the year! White Center generated 65 million dollars
in May at Sotheby’s, overtaking Warhol's price record by 1 million dollars. This historic sale more than tripled
his previous record of USD 20 million generated in November 2005 at Christie’s by Color Field, a homage to Matisse
(1954). More than ever before, 2007 saw a parade of multi-million-dollar Rothko sales: six works by Rothko fetched more than
10 million each in less than one year (between May and November 2007) compared with only four between 2000 and 2005. His most
popular and most expensive works are the large format paintings from the 1950s: highly colourful meditative spaces. However,
the acceleration of sales fetching seven and eight figure numbers has drawn works to the market that were previously less
sought-after, such as his works on paper or his Untitled black and greys from 1969. In addition, 2007 also saw one
of the Untitled works from his more sombre period breach the 10 million dollar threshold for the first time (14 November,
Sotheby’s).
5 – Claude MONET : 165 M $
One of the leading lights of French impressionism,
Claude Monet is no stranger to this list. In 2004, his works occupied the number two spot behind Picasso with sales of USD
80 million. In 2007, however, this score was beaten in just two days of sales at Sotheby’s and Christie’s in London
(18 and 19 June) when a catalogue of major works by the artist generated close to GBP 45 million (USD 84 million). The highlight
of this summer sale, Waterloo Bridge, temps couvert (1904), sold on the first day at Christie’s to an American
collector for GBP 16 million (USD 31.7 million), ten times the price paid by the previous owner 17 years earlier. The following
day Sotheby’s riposted by selling Nymphéas - painted the same year as Waterloo Bridge - for
GBP 16.5 million. Claude Monet therefore remains a safe investment whose work has clearly benefited from the solid health
of the art market with 27 sales passing the million-dollar mark in 2007 versus 16 the previous year. Better still, his paintings
generated more seven or eight figure sales in 2007 than in 1990 which marked the summit of the last speculative bubble (23
sales above the million-dollar line).
6 – Henri MATISSE : 114 M $
In 2007, three major works toppled the previous
record set by Matisse: two Odalisque paintings and Danseuse dans le fauteuil, sol en damier. The previous year, Matisse
had hit a new high of USD 16.5 million for Nu couché dos at Sotheby’s New York. A year later, the same
auctioneer was hoping for an even bigger sale with l´Odalisque grise et jaune (1925), whose value had been
estimated at up to USD 20 million. The painting ultimately fetched only USD 13.1 million, failing to reach even its low estimate
. But in October 2007 at Christie’s, bidding for L'Odalisque, harmonie bleue climbed to a dizzying USD
30 million, 10 million above its high estimate. The two Odalisques and the Danseuse thus fetched more than the total
sum generated in 2006 (USD 59.7 million) by 12 oils on canvas, four sculptures and around 60 drawings. Indeed, the 2007 sales
lifted Matisse three places higher in our Top 10 ranking and simultaneously set a new record in terms of annual revenue for
the artist.
7 – Jean-Michel BASQUIAT : 102 M$
The youngest artist in the Top 10 also achieved
the most impressive growth: in 2007, his price index had climbed 480% over 10 years. Basquiat’s presence in the Top
10 is not a first, since he was in 9th place in 2005 with total sales exceeded USD 35 million, including 11 million-dollar-plus
sales. But the exceptionally strong 2007 score was more noteworthy: his work achieved twice the number of million-plus sales
and total sales revenue for the year was more than three times higher than in 2006. This upward price spiral tends to accelerate
market turnover. Warrior for example, acquired in November 2005 for USD 1.6 million at Sotheby’s, went under
the hammer again at the same auction house in 200, fetching more than USD 5 million (GBP 2.5 million). The top ranked million-plus
sale in 2007 was a mixed-technique work from 1981 that smashed the artist’s previous record by passing the USD 10 million
mark. Valued at between USD 6 and 8 million, the piece fetched USD 13 million on 15 May at Sotheby’s NY. The autumn
sales confirmed Basquiat’s unprecedented ascension when his large-scale Electric Chair generated USD 10.5 million,
again at Sotheby’s NY.
8 – Fernand LÉGER : 92 M $
Fernand Léger slipped out of the Top 10
in 2006, but he climbed back to 8th place in 2007, a position he occupied in 2005. Successful auctions of his work in New
York in May and November set new records for the artist. The corner-stone of the May sales was Les usines (1918)
featuring one of Léger’s favourite themes and painted with a chromatic range based on primary colours and their
natural complements. For this painting, the bidding at Sotheby’s soared past the estimated valuation range of USD 5
to 7 million to reach USD 12.75 million. Six months later, Christie’s sold the superb Esquisse pour le tableau definitif,
étude pour les constructeurs (1950) for USD 10.5 million. On the same day, Christie’s also offered Dessin
pour contraste de formes (Composition II), a gouache drawing in black and white on beige paper from the height of the
Cubist period in 1913, which went under the hammer for an impressive USD 4.2 million. This marked an all-time record for a
Léger drawing.
9 – Marc CHAGALL : 89 M $
Although Marc Chagall slipped three places compared
to 2006, the sales generated by his paintings held steady despite a sharp reduction in the number on offer. Sixty two canvases
went under the hammer in 2007, down from around a hundred in 2006. Chagall was however a higly prolific artist and –
thanks notably to his numerous lithographs and etchings – is the second most frequently sold artist at auctions behind
Pablo Picasso. His multiples account for more than 85% of the total volume of transactions; close to 400 went to auction in
2007 alone. An exceptional sale of more than USD 10 million enabled him to hold on to his place in the Top 10 this year. This
was a circus scene more than three metres wide that went for USD 12.25 million at Sotheby’s New York in May. The high
price failed however to break the seventeen-year-old record set at the same auction house for Anniversaire (1923),
sold at the peak of the 1990 speculative bubble for USD 13.5 million. Although his landmark works are becoming increasingly
rare, the market for the artist’s work is far from dormant: the price index for his work rose by almost 80% between
January 2000 and the end of 2007.
10 – Paul CÉZANNE : 87 M $
After the centenary of Cézanne’s
death in 2006, last year saw a more than 50% increase in his annual sales revenue. Considered by Picasso as the father of
modern art, Cézanne has been absent from the Top 10 in recent years due to the scarcity of major works capable of generating
a multi-million dollar price tag. Between 2002 and 2006, annual sales failed to pass the USD 43 million mark (half the 2007
level) despite the fact that just one of his paintings is capable of fetching well above this sum. This was the case in 1999
at Sotheby’s, where Rideau, cruchon et compotier, a 1893-1894 still-life from the Whitney collection went under
the hammer for USD 55 million. This set a record that has yet to be beaten for a Cézanne, although other still-lifes
have sold for multi-million dollar sums more recently. At the 2006 sales for example, Sotheby’s auctioned the magnificent
Nature morte aux fruits et pot de gingembre, a mature work dating from around 1895, for USD 33 million. No other
work of this quality came up for sale in 2007. The most expensive was also a still-life, but it was painted earlier (1877)
and is considered less noteworthy; Compotier et assiette de biscuits nevertheless fetched USD 11.25 million on 6
November at Christie’s NY.
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